Square Register / SquareUp – what you need to know

Own a small business? Here’s something you need to know. While the “Square” offers faster credit card processing, it can also create new problems for your small business. Here’s what we learned – some Pros and Cons:

If you’re in biz for yourself, you know there are limited options for easily processing credit cards. Square Register (also known as SquareUp) offers a convenient and simple way for small businesses to collect credit card payments with their smart phone or tablet. We were so excited when we first learned about it we were giddy. Previously, the only way we could accept online or credit card payments were either costly programs offered by our bank, or long wait periods – and even more costly processing – through PayPal. And as small business owners know, unless you’re really into Ebay, PayPal ain’t no “Pal”. You pay a big premium as a small business person to accept payments through PayPal, plus you add on several days before your payment shows up in your bank account.

So – Square Register offers a solution for small businesses like ours. But read on, because we learned a few things the hard way.

As soon as we got an iphone, I promptly contacted SquareUp.com, and received my free card reader, pictured below. Cute, right?

It just slips into the ear bud port of your smart phone or iPhone. When processing a payment in person, people just sign your phone with their finger. Chances are you’ve used one before when purchasing from a small business or at a market?

A cute little device that plugs into your headset port on your iPhone or smart phone.

I couldn’t wait to process my first payment. While the fees are higher than some credit card processors, for companies like ours which receive smaller monthly credit card payments, SquareUp was a no-hassle way to collect. The speedy payments far outweighed the 30-day wait we often endured from customers paying by standard check.

CON: The fine print that can really mess up your cash flow

With SquareUp, businesses are allowed a ceiling amount (usually $2,000 per week to start) in credit card transactions without signatures. This is to prevent fraud. When your business grows, or you have a busier sales season, you can raise this amount by request. SquareUp may (or may not) ask you for bank statements to validate this. Curiously enough, they may also ask you for your company’s Facebook, LinkedIn or Twitter accounts.

We successfully raised our weekly ceiling several times, until for reasons unknown to us, SquareUp didn’t like our neglected LinkedIn page. I was in a hurry, frankly. I needed to process a bulk of sales coming in. Even though our client authorized these via fax (providing a signature) the Square decided to keep our money and play around with it for 30 days.

Word to the wise about Square Register: Here’s what we learned, that’s not clearly stated in the Square’s web site: You can process your approved amount within a 7-day period. Not a new week. 7 days. If you don’t follow that, they will hold your money for 30 days. That’s even if you’re $21 dollars over your approved amount.

So what’s a flustered, small business owner who needs to pay hardworking contractors to do? Email and call Square Register’s customer support line you say?

CON: No customer support. Who’s running things at Square?

There is no customer support. And while I read a cautionary review about that issue before starting to use the Square, it suddenly became MUCH more important when Square was holding several thousand dollars of ours.

After several bi-hourly emails, I finally threatened to blog about this poorly stated policy of the Square – thus, my diatribe written here. After my threat I received an email from a guy named Warren (the first to actually use a personal name, rather than the automated response emails I was receiving), who explained the confusing policy, and told me he would “release the funds” since Square has a “one-time release” policy for situations like this. How gracious, we thought. Our money. There was no voice, no human, but an email signed “Warren”. At least it was something, but the response took about 12 hours.

CON: Square is not 24 hours, and it runs only on Pacific time

Yeah, that’s a problem when you’re in a different time zone and the folks in CA aren’t even awake yet.

Small business owners need to know this important detail, and it’s not clearly spelled out on Square Register’s web site.

When we received another payment exactly 6 days after the previous one, I intentionally waited one day, then processed it through my Square account – to make sure 7 precise days had passed (that’s 168 hours, plus an hour for good measure), and we received our deposit 3 days later. Ahhh.

Overall, I think the Square is a good tool. It’s cheaper than a lot of POS systems for restaurants (sans the inventory reporting, but costs a lot less). It costs less than PayPal, and is much faster. It shows a history of transactions so you can see your billing. It works for both service-oriented products and tangible products. Most of all, it offers small businesses a way to collect money like bigger companies, but simply.

None of this was plainly stated on Square’s web site, by the way. Phrases like “Rolling 7-day period” were used, when they could have simply stated “wait 7 days before going above your processing limit”. I still haven’t figured why our social media activity is like cosigning when it comes to verifying our sales. We have more followers than some substantially larger, local companies.

Square is a good tool because presently it’s the only tool. Hopefully things will improve – or small business owners will have more options soon.

One thought on “Square Register / SquareUp – what you need to know”

Happily Square Register just rectified this problem, and no longer requires a hold on manually entered funds. THANKS FOR LISTENING TO YOUR CUSTOMERS SQUARE! Hats off to those in the company who made it happen. You’ll have many more happy customers because of it!

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